Joe when you get a reading that seems unusually high or low its advisable to repeat the test straight away.
Weird readings are quite common, usually caused by a faulty strip or something on the fingers giving a false result, a repeat test would have confirmed that high level.
Even if the result was accurate I doubt that the water made too much difference. Blood sugars can rise and fall quite quickly especially when you take the +/- 15% accuracy of the meters into account.
Your 8.6 could have actually been somewhere around 7 and the 5.2 closer to 6 so it's possible that your levels really only dropped just over 1mmol in the hour between tests.
Not trying to put you off drinking water, good hydration is important but I don't think you have discovered a glucose lowering trick.
Wouldn't it be great if we could eat pizza then drink water and just flush it out, I suppose it doesn't hurt to dream.